CHICAGO--(BUSINESS WIRE)--Fitch Ratings has endorsed a Insurer Financial Strength (IFS) Ratings
of Minnesota Life Insurance Company (Minnesota Life) and a subsidiary,
Securian Life Insurance Company during 'AA'. The Rating Outlook is Stable.
KEY RATING DRIVERS
Fitch's confirmation of Minnesota Life's ratings reflects a company's
intensely clever change piece fundamentals, regressive risk profile
and fast earnings. The ratings also simulate a clever position in the
rarely rival organisation life word market.
Fitch views Minnesota Life's intensely clever capitalization, that is
reflected by a NAIC risk-based collateral (RBC) ratio of 513% during year-end
2015, as a elemental strength to a rating. Operating leverage, as
totalled by practiced liabilities to sum practiced capital, is among the
lowest in Fitch's star during 4.6x. Financial leverage, tangible as
over-abundance records to sum practiced collateral (TAC), stays intensely low at
Minnesota Life has equivalent and diversified sources of income that
revoke gain volatility. Pretax handling lapse on resources remained
plain during 0.97% in 2015 compared with 1.03% in 2014. Minnesota Life
reported net income of $281 million in 2015 compared with $366 million
in 2014. The decrease was mostly driven by reduced gains on sales of
investments and changes in a value of seductiveness rate and equity hedges
formed on rate and marketplace movements.
On an handling basis, gain were radically prosaic year-over-year.
Operating gain enclosed repeated surprising items, such as the
deferred merger cost impact of hedging formula and pension-related
costs. Excluding these items, core gain declined by 2% in 2015,
essentially driven by adverse mankind in organisation word compared
with auspicious mankind in 2014. Results were rather equivalent by
advantageous responsibility government and above-average prepayment income.
Unfavorable mankind continued into first-quarter 2016, that led to
reduce gain during a period.
Fitch anticipates that low seductiveness rates will continue to offer as a
headwind to Minnesota Life's profitability. Also, poignant capital
marketplace declines could lead to reduce price income and increasing earnings
volatility, given a company's sizeable apart comment liabilities.
Fitch records that Minnesota Life's investment and liquidity profile
continues to be favorable. The association has a large, investment-grade,
publicly traded bond portfolio, comparatively low bearing to unsure assets
and a fast guilt structure.
Minnesota Life has a clever rival position in a organisation life
word market, as a third largest provider in terms of premiums.
The company's rival advantage is upheld by a service-driven
indication and customized systems, that support really clever retention
levels. However, a association faces heated foe from larger
companies with larger scale and resources. Additionally, a company
faces scale vigour in a rarely rival retirement services
market, that continues to consolidate.
The pivotal rating triggers that could outcome in an ascent include:
--An extended marketplace position and size/scale total with sustained
collateral strength and low item risk.
The pivotal rating triggers that could outcome in a hillside include:
--A decrease in a company's RBC ratio to 450% or lower;
--Significant decrease in financial opening with GAAP-based
lapse on resources next 0.80%;
--An boost in financial precedence above 15% as totalled by
Fitch endorsed a following ratings:
Minnesota Life Insurance Company
--IFS during 'AA';
--Issuer Default Rating during 'AA-';
--$118 million Rule 144a over-abundance records 8.25% due 2025 during 'A+'.
Securian Life Insurance Company
--IFS during 'AA'.
The Rating Outlook is Stable.
Additional information is accessible on www.fitchratings.com.
Insurance Rating Methodology (pub. 17 May 2016)
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